Sleep-deprived Apple fans brave rain for iPhone 4

Hundreds of fans flocked to stores in Tokyo to be the first buyers of Apple's iPhone 4 and some lined up in San Francisco as the red-hot smartphone rolls out on Thursday in five of the world's six largest economies.

Sales of the iPhone 4, which boasts a higher-quality screen and longer battery life than the previous model, have blown past expectations, overloading systems and causing Apple and carriers to halt taking pre-orders as supplies run out.

In Japan, where the gadget was launched before other countries due to the time difference, fans dressed up like iPhones and painted iPhones on their faces.

"I can't stop smiling," said Noboru Takahashi, a musician who had waited in line since Monday at Softbank's flagship store in a posh Tokyo shopping district. He was the first in a queue of more than 300 people.

The iPhone has been a huge success since it made its debut in 2007, boosting Apple's margins and transforming it into one of the world's leading mobile device makers.

However, the supply shortage, which an analyst said was worsened by a lack of LCD panels, could cap initial sales and hurt Apple when it faces a slew of new rivals, namely high-powered handsets based on Google Inc's Android software.

"The Droids are coming and current demand for the iPhone 4 implies a titanic battle between Apple and Google is imminent," industry tracker comScore said in a statement.

Apple has announced sales of more than 600,000 iPhone 4s, a record for just a single day of pre-orders last week, meaning it sold seven of them per second.

The iPhone is Apple's main growth driver, and is expected to soon become its biggest source of revenue as the company expands the smartphone around the globe. Some analysts estimate more than two-thirds of iPhone sales now come from overseas.

The device, which also offers video chat via WiFi, and a gyroscope sensor for improved gaming, comes less than a month after Apple's iPad went on sale outside the United States and has beaten sales expectations.

The iPhone 4 debuts in the United States, France, Germany and the UK later on Thursday.

At Softbank's flagship store in Tokyo, there was only enough inventory for customers without reservations who had lined up by the day before the launch. The price starts at 46,080 yen ($512) in Japan, but customers can get one for free in real terms if they sign up for certain services.

Takahashi and many others in the queue were using the Ustream online broadcasting service and Twitter microblogs to report on their movements and solicit camping gear and supplies, including umbrellas, as they waited through humidity and rain.

"The hardest part was the heavy rain during the day yesterday," said Akira Nakazawa, a 18-year-old student who had been waiting since Tuesday to be the first of 500-plus people lining up outside an Apple store in Tokyo's Ginza shopping district.

"I had two umbrellas to protect my stuff and myself."

Ayaka Sato, a 22-year-old worker at an IT firm, said iPhone 4's front camera was the most attractive new feature of the phone. "It was kind of hard to take videos of myself like this," she said, holding her iPhone backward. "I am so looking forward to using the front camera."

WAITING IN SLEEPING BAGS

In the United States, the more avid of the Apple faithful have already begun lining up, a day before the launch.

Roughly 20 people waited patiently in a bedraggled line amid sleeping bags, pillows and a neon-colored inflatable couch outside an Apple store in San Francisco on a windy Wednesday.

One fan with a blue sleeping bag who gave his details only as Imran, 25, said two people had approached him about buying his spot in line.

"I'm in line to replace the first generation that I ridiculously stood in line for the first time, and am ridiculously standing in line for again," he added.

The forlorn group belied the excitement that has raged online the past week. On eBay, iPhone 4s had been going for thousands of dollars apiece, with one enterprising seller offering a black iPhone 4 at an exorbitant $15,000.

For the current quarter, which ends June 26, analysts roughly expect Apple to sell 8-9 million iPhones in total, which includes sales of older generation models. Analysts expect Apple to ship 10 million or more a quarter, as output ramps up to meet demand.

BGC analyst Colin Gillis expects Apple to set a new record for being the first company to sell a million smartphones in a single day. But he warned that production snags might dampen supply and hurt initial sales.

"It is very possible that the iPhone encounters production issues -- a normal occurrence as a cutting-edge collection of technologies goes into scaled production," he wrote. "This could create a situation where demand is greater than supply -- limiting the number of iPhone 4 phones sold."

The latest phone will be available in 18 countries in July and 88 by September in the quickest-ever international roll-out for an iPhone.